Writing about random topics

Accelerated mortgage payments

In 2014, I paid down my mortgage principle more in one year than I did in the previous 5.5 years put together.

For you see, from Sept 2008 to Dec 2013, I paid off 11% of the principle. From Jan 2014 to Dec 2014, I and the wife paid off 20% of the principle (meaning that the mortgage is 31% paid off).

We’ve been reasonably aggressive in paying it down. My condo is currently rented out but it still loses money each month. If I only paid the exact amount I needed to pay, I would lose $416 each month, or $5000/year. Because of the way taxes work, it ends up being less than that. But I am still losing money on it because I can’t get enough rent to cover everything relative to how much I could actually get (i.e., the market won’t let me raise the rent high enough to cover the total payment).

The goal is to pay off the condo in less than 4 years, maybe 3 years which is aggressive. Once it is paid off, it will generate about $450/month in net positive cash flow assuming nothing breaks.